Housing Development Finance Corporation (HDFC) has hiked its retail prime lending rate (RPLR) for home loans by 25 basis points (bps) with effect from March 1, 2023. RPLR is the rate at which banks lend to their most creditworthy customers. Thus, a hike in RPLR will affect price of all loans linked to this benchmark.
Consequently, higher RPLR will result in higher equated monthly instalments (EMI) for customers. The Reserve Bank of India (RBI) has indicated that it may continue to raise repo rates. As such, it is likely that banks will continue to pass on rate increases to borrowers.
The adjustable rate home loan (ARHL) rate for HDFC standard home loans till Rs 30 lakh stands between 9 and 9.5 per cent. For women borrowers, HDFC gives a 5 bps discount.
Standard home loan rates differ with the borrower and the loan amount. For instance, a borrower’s credit scores, demographics, repayment of other loans will decide his/her home loan interest rate.
HDFC’s special home loan rates are currently between 8.45 and 8.95 per cent.
As home loans have to be repaid over a long tenure, it is important to calculate the total interest liability before applying for a loan.
Here’s a look at the rates offered by other top players in the market.
Other Banks/ Finance Companies
LIC Housing Finance is offering home loans at 8.45 per cent. Home loan interest rates start at 8.45 per cent for salaried and professional borrowers with credit scores equal to or above 750 for loans up to Rs 20 crore, according to the LIC Housing website.
For credit scores between 700 and 749, the rate of interest is 9.05 per cent up to Rs 5 crore, and 9.25 per cent for amounts over Rs 5 crore and up to Rs 20 crore. In case of salaried employees, the maximum repayment period is 30 years. In the case of self-employed individuals, the maximum repayment period is 25 years.
The rate of interest offered to borrowers with Cibil scores between 600 and 699 is 9.30 per cent up to Rs 50 lakh. The rate of interest is 9.50 per cent for amounts over Rs 50 lakh and up to Rs 2 crore, and 9.65 per cent for amounts above Rs 2 crore and up to Rs 20 crore.
SBI Home Loans is offering borrowers with a credit score of 750 their regular SBI home loans at a rate of interest of 8.85 per cent until March 31, 2023. The rate of interest is 9.05 per cent for credit scores between 700 and 749.
Punjab National Bank, one of the largest providers of home loans, is offering a rate of interest between 8.55 per cent and 9.05 per cent on home loans. Salaried employees with credit scores of 800 or higher are eligible for this rate.
A rate of interest of 8.8 per cent to 9.4 per cent is available to salaried individuals with credit scores ranging from 775 to 799. Nevertheless, this is only applicable to loans up to Rs 35 lakh. Rates above this amount is marginally higher.
